HSBC to pay $30 million to settle bond rigging lawsuit in U.S.

NEW YORK (Reuters) - HSBC Holdings Plc has agreed to pay $30 million to settle litigation by investors who accused 11 big banks of rigging the roughly $9 trillion government agency bond market from 2009 to 2015.

FILE PHOTO: The HSBC logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause

The settlement with the British bank was made public late Wednesday night in the federal court in Manhattan, and requires approval by U.S. District Judge Edgardo Ramos.

HSBC is the third bank to settle, after Deutsche Bank AG and Bank of America Corp agreed in August 2017 to pay a respective $48.5 million and $17 million and cooperate with the plaintiffs.

Investors led by two Alaska government entities and the Iron Workers Pension Plan of Western Pennsylvania accused banks of colluding to manipulate prices of U.S. dollar-denominated supranational, sub-sovereign and agency bonds.

They said the banks used chatrooms and other means to share price data and coordinate trading, effectively functioning as a single “super-desk,” to reduce competition and boost profit on “virtually every trade” at customers’ expense.

“Rare is an antitrust case like this one, where a large volume of ‘smoking gun’ evidence exists at the pleading stage,” they said in an amended complaint filed on Nov. 13.

HSBC denied liability, but settled to avoid more litigation that could prove “extraordinarily expensive and time-consuming,” according to its settlement agreement.

It also agreed to cooperate with the plaintiffs, including by providing evidence such as electronic chats among the banks.